Correlation Between Gap, and MIZUHO

Can any of the company-specific risk be diversified away by investing in both Gap, and MIZUHO at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Gap, and MIZUHO into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between The Gap, and MIZUHO FINANCIAL GROUP, you can compare the effects of market volatilities on Gap, and MIZUHO and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Gap, with a short position of MIZUHO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gap, and MIZUHO.

Diversification Opportunities for Gap, and MIZUHO

0.09

Correlation Coefficient

Gap,  MIZUHO

Significant diversification

The 3 months correlation between Gap, and MIZUHO is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding The Gap, and MIZUHO FINANCIAL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MIZUHO FINANCIAL and Gap, is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on The Gap, are associated (or correlated) with MIZUHO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MIZUHO FINANCIAL has no effect on the direction of Gap, i.e., Gap, and MIZUHO go up and down completely randomly.

Pair Corralation between Gap, and MIZUHO

Considering the 90-day investment horizon The Gap, is expected to generate 1.77 times more return on investment than MIZUHO. However, Gap, is 1.77 times more volatile than MIZUHO FINANCIAL GROUP. It trades about 0.05 of its potential returns per unit of risk. MIZUHO FINANCIAL GROUP is currently generating about 0.01 per unit of risk. If you would invest  2,266  in The Gap, on September 3, 2024 and sell it today you would earn a total of  159.00  from holding The Gap, or generate 7.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	65.63%
Values	Daily Returns

The Gap,  vs.  MIZUHO FINANCIAL GROUP

Gap,

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in The Gap, are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Gap, may actually be approaching a critical reversion point that can send shares even higher in January 2025.

MIZUHO FINANCIAL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MIZUHO FINANCIAL GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, MIZUHO is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gap, and MIZUHO

The main advantage of trading using opposite Gap, and MIZUHO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gap, position performs unexpectedly, MIZUHO can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in MIZUHO will offset losses from the drop in MIZUHO's long position.

The idea behind The Gap, and MIZUHO FINANCIAL GROUP pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.